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2/1/2010
Jirschele: Why in the world does Appleton need a convention center?
It’s time to be ruthless. Cold. Calculating. Ferociously businesslike.
It’s time to talk--seriously--about a convention center for downtown Appleton in terms of its utility as a business tool to increase traffic and density.
We’ve talked about and studied and considered and reflected on the potential of creating a convention center for decades. But today, the experts are telling us, there is a unique moment of opportunity for us to consider. The potential right now, they say, is remarkably favorable for Appleton.
Quite simply, more people... for more time... spending more outside money... equals prosperity, vibrancy, development and momentum--sorely needed momentum--for Appleton's downtown and the surrounding communities.
The second half of a convention center feasibility study by Convention, Sports & Leisure International (CSL), commissioned by the Fox Cities Convention and Visitors Bureau, recently was presented to the Appleton Redevelopment Authority. It was embraced by that committee and unanimously recommended to the Appleton Common Council, which will get its first look at it as a body in a pre-council meeting (open to the public) at 6 p.m. February 3 at City Hall (see below).
News reports and some local authorities already have overstated the study's conceptualizing about possible costs and locations by suggesting that the conclusions are more definitive than they truly are, under the charge of the study.
The critical aspect of the study, a factor most have missed so far, is that most of a convention center for downtown Appleton already exists, and may be far less expensive to complete than anyone suspected.
The study discovered that while downtown Appleton is well thought of and remarkably marketable, the primary convention resource, The Radisson Paper Valley Hotel, lacks the exhibition space now needed by even small- to mid-sized conventions...including gatherings that have been to the Fox Valley and would like to return but cannot, because other facilities have "grown past" what the Paper Valley can offer.
Appleton can provide more on-site hotel rooms than many other venues in the state. We have an advantageous number of meeting rooms, banquet rooms and breakout spaces. The hotel is well-liked, professional. The downtown is engaging and friendly to conference attendees. We have established market visibility and legitimacy on our side.
We lack only the "big box" exposition space other sites offer. That's it. Just the space where static displays and booths can be put up on a large scale. The rest of what we need as a modern convention center already is in place!
Required now is the will to understand that Appleton downtown, as a business entity and as an economic engine for the region, requires a dynamic, economic infusion to nurture a development curve that has been flat for far too long...and that complementing the convention capacity we already have may just be the quickest way to bend that curve.
Smart, far-sighted business evaluation is necessary. Dismissive, knee-jerk reactions to preliminary cost figures, location restrictions, and suggestions of partnerships and financing schemes aren't useful.
In these economic times, we cannot afford to neglect potential. We have the business talent and resources in our area to evaluate this opportunity in terms of return on investment, benchmarked growth and clear development metrics. Let's put those minds to work doing some "intellectual spadework" to make it fit our capabilities, if we can.
And let's see if we can shake off the instant pessimism that too often greets new ideas and growth in our community.
Jeff Jirschele represents the residents of the 15th Aldermanic District in Appleton, chairs Appleton’s Utilities Committee and serves on the Board of Public Works and the Community Development Committee.Public Meeting to present the Convention Center Feasibility overview and Opportunities Study:
Wednesday, February 3, 2010, 6:00 P.M., Council Chambers, 100 N. Appleton St., 6th Floor
Lynn Peters, Executive Director, Fox Cities Convention & Visitors Bureau, will present the study. The project was overseen by a task force that included Bill Welch, President and CEO of the Fox Cities Chamber of Commerce and Industry; Peters and 11 other community leaders.
The study included: an analysis of existing market conditions and comparable and competitive facilities, interviews and focus groups with local leaders and meeting planners who might use the facility, a review and rating of potential locations using a site analysis matrix, financial analysis of construction and operations costs, and an economic impact assessment.
COMMENTS
Brookings Inst. is hardly a bastion of conservatism. Perhaps that is all the more reason to heed their warnings:
"The overall convention marketplace is declining in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community, contrary to repeated industry projections."
and
"Nonetheless, localities, sometimes with state assistance, have continued a type of arms race with competing cities to host these events, investing massive amounts of capital in new convention center construction and expansion of existing facilities."
From "Space Available-The Realities of Convention Center Economics...." http://www.brookings.edu/reports/2005/01cities_sanders.aspx
I can cite numerous other studies demonstrating how bad most public convention center economics are.
When I lived in the Phoenix area, the city spent, as I recall, some $20 Million to subsidize their convention center. In an effort to expand and make it more profitable, they "invested" MORE tax dollars, and now the city is in such a fix that 350 cops are being laid off, and many other dept budgets must be slashed. To be sure not all because of the convention center, but SURELY because of the Big Government mindset that brought 'Light rail, convention centers and other boondoggles that the taxpayers ultimately could not afford. Indeed, the question MUST be asked, "If this is such a good investment, why does not someone form a private company, privately funded, to make it happen?
Perhaps another more basic questions might be, "Should government be involved in enterprise at all?" and "Since tax payers are expected to pony up for the benefit of others against their will, is this not a form of theft?"
I remember about a decade ago there was a big push for a convention center in WI Dells. When Kalahari, Chula Vista, Great Wolf and others invested privately, the clamor and the need died down. One difference between these private investments and public ones: SHAREHOLDERS, not taxpayers will pay for mistakes and miscalculations.
Moreover, this is an example of the socialist, interventionist status quo thinking that has destroyed our economy. Citizens of Appleton, DO NOT let this white elephant bury you. Suggest to promoters to put THEIR money where their mouths are, with the message that you will congratulate them if they succeed.
Ken Van Doren (Mon Feb 01 09:26:35 2010)
Let me add that the "economic" impact statement used to justify this is very likely based on faulty reasoning, and incomplete analysis. For example, when I lived in Tempe, AZ, the city paid Touch Ross, a "big 5" accounting firm, some $175,000 EACH to produce studies economically justifying both football and baseball stadiums at tax payers' expense. Total waste of money as NOT ONE expense, like infrastructure improvements, extra police duty, capital costs and cost of operating the facility were included.
And hardly ever is it realized that the money used to support this will be taxed away from individuals and businesses, disrupting existing patterns of expenditure, savings and investment, decreasing the economic vitality of any business that is not likely to benefit if the center is built. Since usually government involvement doubles the cost of a project, you can figure that 2 jobs will be destroyed for every one created. The DE-multiplier effect.
Ken Van Doren (Mon Feb 01 09:36:43 2010)
Ken VanDoren takes a reasoned approch to presnting the other side of the argument. When will we learn that more Government involovement is NOT always beneficial. Nice job, Ken!
Glenn L Schilling (Mon Feb 01 09:58:06 2010)
I agree. Government involvement will make the situationh worse. If it is an economically viable move, then let the private sector do it without public funds--without the community paying precious tax payer dollars. The situation described in Arizona was repeated in cities in Colorado. The city council and some developers thought it would be a "good idea" and tried ramming it through. Citizens would be wise to keep them out of their pockets and kill the convention center--fast!
Janice Taylor (Mon Feb 01 10:41:03 2010)
Nice job Ken. I wonder if anyone out there has a copy of any study that has turned out to be accurate where a center has succeed in a town similar to Appleton. Then , is there a post development analysis of the same site to show how things actually turned out?
It's really hard to get a handle on marginal sales or hotel tax revenues, multiplier effects or your "DE-Multipliers" etc. City center and Richmond Terrace are two examples of trying to push a square peg into a round hole at taxpayers expense. The PAC would be in the same place except for the donations that support it. Unfortunately, private donations to support a convention center are highly unlikely.
dave allen (Mon Feb 01 10:42:43 2010)
I see all the nay sayers are coming out of the woodwork. Typical response from some when any project like this comes along.
A lot of points where made and few worth reading. One cannot compare The Dells situation to Appleton. Apples and oranges. A total resort area to a business and industry city.
As one of the premier tourism experts in Wisconsin years ago, I do know a little about this subject.
It always comes up that only a few from receive any benefits from a convention center. Completely wrong. Obviously the first dollars go to motels, hotels, restaurants, gas stations.
But then you must follow the money.
All these entities are purchasers of goods and services throughout the area. They all need insurance, furniture, energy, transportation, food purchases from wholesalers, employees, etc. Then in turn, ththose entities need similar items. Employees buy insurance, cars, furniture, energy, food, health supplies, etc., etc.
Years ago there was a study and it showed that every dollar spent circulated about ten times in that city before leaving.
But first many things have to be taken into consideration. Site (easy walking distance or good parking from hotels, etc.). Type of events you will be looking to attract. Any events that the city or its schools could use it for? Athletic events like city wide or state wide tournaments in basketball, volleyball, etc. Could Lawrence use it? Rent it for basketball games if they get more popular. Their gym only holds about 1,200 or so.
Or for graduation events.
I went to more grandsons high school graduation recently in Scottsdale. They had no suitable facility at the school so they rented the basketball arena at ASU. An hour away.
All cities pay for a Convention Center. They can sell the name for additional funds. There are things that cities have to pay for that are usually not paid for by residents except through taxes. City streets to get around. Water and sewer works. They pay for the schools that not everyone uses. Police and fire. All sorts ofd services. A convention center is just one. It brings in dollars from ouside. It always nice to use money from outside the city to pay for jobs that come from the centers activities.
While I don't have all the answers, what I have given you should make things a bit more clear....hopefully!
Any questions, give me a call.
John Hyland (Mon Feb 01 12:54:12 2010)
Ken,
Do you have any examples you can think of for successful small market convention centers? Your ASU example is a good one for a large market without adequate facilities. But what about small ones where there is competition just down the road. (KI Center in GB,and the Oshkosh Convention Center). The velocity of money through the system and the resulting marginal sales taxes, hotel tax etc is one way to get the public dollars back. What is the most relevant example?
dave allen (Mon Feb 01 16:59:19 2010)
Well Jeff Jirschele and John Hyland, just keep in mind that the poor schlubs who don't share your enlightened insight in to this escapade are the very people you are going to have to convince if you want to muster up the bucks to make this work.
As for me, I have to ask, if this is such a profitable venture, why hasn't someone in the private sector ponied up? Answer - it's not.
Why don't a GROUP of downtown businesses collaborate to make it happen, after all ... they're all going to benefit, aren't they? Answer - no, otherwise they would have done it long ago.
Would it be nice? You bet. It would look really cool and be a great resource that would benefit a VERY small segment of our community. There would be a fair number of jobs created for Lawrence students (waiting tables, etc.) ... and some nice profits for those who own the Paper Valley and an exclusive group of contractors who would provide Pipe & Drape, electrical, and carpentry work on the convention floor.
Ultimately, though, Ken has it right ... this should not be the function of government. It's an excuse for a governmental body to spend money, but it's not essential to the community and "wants" give way to "needs" in these economic times.
Want a convention center? Open your checkbook. If you make money on the venture, good for you - I won't begrudge you a dime. Just don't take my money then turn around and profit from it yourself.
Jeff Riedl (Mon Feb 01 17:16:51 2010)
John, I usually agree with your reasoning but must differ with you here. We were told that we needed the PAC but we've seen that it has been a black hole for the taxpayers of Appleton. They are not, apparently financially independent but don't want the citizens to know since they refused to make public their financials [see blog dialog of several months ago when Jo tried to "pin them down"]. I wonder if the cost of extra police to handle the traffic is accounted for in the costs or whether the APD just has to "eat that". I agree with the response that private investors should be involved and let them profit or lose with the investment. In this economy is is hard to justify more expense on the taxpayers. I shutter every Dec.when just after Christmas I get my late Christmas "gift??" from the City. Further I question whether Appleton has the grand supply of hotel rooms that it is supposed to have. The only hotels I am aware of within walking distance of the PAC are the Radisson and the Copperleaf. We do, however, have a sufficient number of restaurants to offer guests. If the Convention Center is out in Grand Chute, then their tax base will profit, not Appleton's, right? And where in GC would the Convention Center go where people could walk to it?
BHM (Mon Feb 01 17:55:51 2010)
Dave-
I do not even live in the Fox Valley area, so am not interested in finding the rare examples of "successful" government spending. I do know that in each and every case I personally have studied, various specious, and yes, dishonest arguments are made to justify what 95% of the time can only be described as boondoggles. The
Appleton venture is very likely to be of the same ilk. Moreover, even if successful, I would still oppose this venture on moral and philosophical grounds. IT IS NOT THE JOB OF GOVERNMENT TO PROVIDE JOBS OR ECONOMIC DEVELOPMENT. We certainly had a more sound economy when we participated less.
BTW, arguments about "multiplier effect" are highly suspect. I have seen it figured at from 1.7 to 10 times the original investment. Usually it is at best a WAG -wild ahhh guess.
Velocity of money? Usually not all that variable, except in uncertain economic times. I mean, the basic necessities of life do not vary greatly, and most of us only have so much for discretionary spending. Moreover, as a sound economy depends on savings and investment, increased velocity means liquidation of savings, and quite likely, less wealth in the future.
John- Yes, am but a mere mortal, a dummy and a naysayer. As I demonstrated, even "experts" often can not be trusted. (/Reference the shoddy study by Touche Ross) And as I inferred, it would be surprising if I could NOT find some dubious statistics in the study for this project. But even your comments contain some "inaccuracies."
ALL communities DO NOT pay for a convention center. Nor should they.
As Tempe where ASU is located adjoins Scottsdale, only if your grandson lives out by Horseshoe lake is it possible for him to live in Scottsdale and be an hr. from ASU. And recall that Scottsdale is one of the richest communities in AZ, if not the country. So if they can not afford a suitable gym, how does that justify this project?
One thing I did not mention in the above arguments is that when government participates in the economy, you can pretty much be sure that someone's bread will be buttered a little heavier than everyone else's. Decisions WILL be made at least as much for political as for economic purposes. So your advice is well taken: follow the money. All the way back to who gives what to the politicians who will decide this.
The purpose of citing the Dells example is that PRIVATE investment created not one, but several convention centers. And again, I say not NAY, but go ahead and invest your own money. If it is as good an investment as you suggest, you should be able to convince your friends and relatives to do likewise.
And your list of benefits, what about all those businesses that do not use subsidies, but ALSO create the same kind of derivative benefits to other businesses and government? So should we subsidize them too? And how will we decide whom to subsidize, whom NOT to subsidize, nd by how much? Or should we subsidize everyone? If not, why not? And in case you have not noticed, the the economy is in the dumpster, I maintain in large part BECAUSE of the big government thinking that has the real cost of government in excess of 60% of GDP. (that is all taxes, direct and indirect, plus all the regulatory costs that are imposed on individuals and businesses.) Not to mention that unfunded liabilities primarily of the federal government will require an approximate doubling of the tax rate, so the cost of government could soon be on the order of 100% of our GDP. Unsustainable, no matter what geniuses and experts say.
"Government is that great fiction by which everybody endeavors to live at the expense of everybody else." Frederic Bastiat.
Ken Van Doren (Mon Feb 01 23:08:39 2010)
Dave, I'm assuming (hoping) the study presented Wednesday evening (6:00, Council chambers, 6th floor, City Hall) will include comparables. I'm going to try to attend - and will be looking for answers to just the questions you pose. Good stuff.
Jo (Tue Feb 02 03:58:15 2010)
Fine, we'll just let Oshkosh, Green Bay, Dells and Milwaukee take all the Conventions in Wisconsin. It just makes our city competitive with others. We have a lot to offer and many large groups with annual meetings just go from city to city. Convention centers are typically not built by private funds although a great deal of private funds will come into it with the sale of the name, meeting rooms. But everybody will get a share, that's what's nice about getting outside dollars. Maybe even Conkeys would still be around if the restaurant owner or the gas station employee had a little more to spend. Who knows.
Like I said, the city provides various services for the public which makes the economy a little better. Take a look again at some of my other points which I made that some just seem to dismiss because they are just set on being against something rather than taking a good look at what it could do for Appleton and the area. Positive works!
John Hyland (Tue Feb 02 09:03:09 2010)
John: "Positive works"
So does freedom. I consider it the ultimate postive and it works more reliably and at a lot less expense to taxpayers.
Ken Van Doren (Tue Feb 02 11:16:37 2010)
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